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Project

Los Reyes Project

Sinaloa, Mexico

Key Facts



LOCATION: 43 kilometres south east of the mining centre of Cosala, Sinaloa

HISTORY: Los Reyes has an extensive mining history that stretches back into the 1700s.

SIZE: 37 contigous claims over 6,300 hectares

RESOURCE UPSIDE: Current resource open on strike and at depth – 8 to 10 new high-grade underexplored surface discoveries for drill testing – Untested new claim blocks added to project have yet to be explored

ACQUISITION: Completed the acquisition of the project from Vista Gold including buy-back of two separate 2% NSRs and the 49% back-in right on underground mining.

INFRASTRUCTURE: Direct access to roads, power, abundant water, and local labor force

LICENSING & PERMITTING: Successfully completed 30-year surface access rights agreement to ensure continued exploration, development and receipt of a mining and construction permit. Permit application submitted for new exploration drilling

IN PROXIMITY: Americas Gold and Silver (TSX: USA; NYSE: USAS) / Minera Alamos (TSXV: MAI) / First Majestic (NYSE: AG; TSX: FR) / McEwen Mining (TSE and NYSE: MUX) / Chesapeake (TSX: CKG)

“Los Reyes is an exceptional opportunity for exploration and development. The Company will continue to drill in order to expand existing resources as well as identify promising new targets.”                         —Company CEO, Dan Kunz

Photo Gallery

Maps & Technical Data

NI 43-101 Technical Report (April 2020).

History

Gold and silver were discovered at Los Reyes by the Spanish in the late 1700s and mining occurred in the area for over 150 years up until the 1950s. The Guadalupe de los Reyes underground mine opened in the late 1800s and to date is the most significant source of gold production in the district. It is estimated to have produced 500-600,000 oz of gold and 40M oz of silver at reported grades of +10 g/t Au and +500 g/t Ag.

From the 1950s through the 1980s there was limited activity in the Los Reyes area other than mostly exploration reconnaissance studies. Modern drilling began at the Los Reyes area in the 1990s and was targeted at defining shallow and lower-grade gold-silver mineralization in areas surrounding the Los Reyes underground operations. Since that time, over 50,000 meters of RC and core drilling have been completed within the current project boundaries resulting in extensive area-wide resource data.

Why Los Reyes?

Los Reyes hosts well-advanced:
Gold resources of:
633kozs
Measured & Indicated
179kozs
Inferred
Silver resources of:
16,604kozs
Measured & Indicated
6,831kozs
Inferred
Established and operating in Sinaloa, Mexico with additional early stage gold/silver opportunities

Exploration Upside with Production Optionality

Los Reyes was on-track to become a heap leach mine in 1998...
When gold prices dropped the project was mothballed.

Current pit-constrained resource areas - open on strike and at depth
Additional mineralized zones - 8 to 10 new high-grade underexplored surface discoveries for drill testing
Untested new claim blocks added to project have yet to be explored
Direct access to roads, power, abundant water, and local labor force
Amenable to simple open pit heap leach mining
Capital structure values company at $20 per ounce gold (peer average $55)
Tens of millions already spent in exploration & engineering studies, 7 open pit deposits delineated
Holds great upside potential for both resource expansion, along strike, down dip, at depth, and in new areas
Experienced management team very familiar with the region and open pit heap leach operations; local team already in place

Concession Boundary

Exceptional exploration upside with current and new targets

  • 8 to 10 new high grade underexplored surface discoveries for drill testing
  • Untested new claim blocks added to project yet to have any exploration

Consolidation opportunity and partnership

  • Potential consolidation of assets and operations into mid-tier producer at a later date
  • Option to acquire Vista Gold’s 2% NSRs (surface and underground) and a 49% back-in right

Mineral Resource

Cutoff Assurance Category Tonnes Average Au Contained Au Average Ag Contained Ag
Grade (g/t) Ounces Grade (g/t) Ounces
0.22 g/t cutoff total M+I 19,752,000 1.00 633,034 26.1 16,604,032
Inferred 7,094,000 0.78 178,837 29.9 6,830,502
0.50 g/t cutoff total M+I 11,822,000 1.44 546,305 34.0 12,912,194
Inferred 3,956,000 1.13 143,605 42.9 5,456,291
0.70 g/t cutoff total M+I 8,697,000 1.74 487,526 38.8 10,839,541
Inferred 2,603,000 1.44 120,422 54.4 4,549,221
0.90 g/t cutoff total M+I 6,746,000 2.02 437,948 43.0 9,317,480
Inferred 1,859,000 1.71 101,910 64.2 3,838,727
1.0 g/t cutoff total M+I 5,914,000 2.17 412,696 45.2 8,595,092
Inferred 1,685,000 1.78 96,654 67.2 3,641,704

 

Resource Expansion

Historic Drill Intercepts

Drillhole From (m) To (m) Length (m) Au (ppm) Ag (ppm)
12GL-04 73.00 78.00 5.00 14.4 156
12GV-02 239.90 245.15 5.25 12.3 745
12SM-08 87.40 91.40 4.00 12.7 348
12ZAP-06 7.00 12.40 5.40 12.5 75
15GDLR-011 98.80 104.00 5.20 10.1 104
GL002 48.77 51.82 3.05 11.9 288
GL005 39.62 42.67 3.05 13.7 926
GL010 47.24 50.29 3.05 11.1 380
GL011 16.76 19.81 3.05 11.4 149
GL073 65.53 68.58 3.05 10.1 202
GW022 82.30 88.39 6.09 14.1 144
SM009 57.91 60.96 3.05 15.9 165
Drillhole From (m) To (m) Length (m) Au (ppm) Ag (ppm)
SM032 50.29 53.34 3.05 47.9 384
TA003 21.34 24.38 3.04 11.7 80
ZA007 30.48 38.10 7.62 10.1 —
ZA016 62.48 67.06 4.58 11.4 —
ZA062 25.91 32.00 6.09 10.8 —
ZA068 47.24 50.29 3.05 10.7 51
ZA082 83.51 86.87 3.36 15.5 35
ZA093 54.86 57.91 3.05 12.4 87
ZA127 3.05 6.10 3.05 13.6 65
ZA148 35.05 41.15 6.10 32.2 80
ZA178 38.10 41.15 3.05 12.7 43
ZA196 51.82 54.86 3.04 14.3 42
Cutoff Assurance Category Tonnes Average Au Contained Au Average Ag Contained Ag
Grade (g/t) Ounces Grade (g/t) Ounces
0.22 g/t cutoff total M+I 19,752,000 1.00 633,034 26.1 16,604,032
Inferred 7,094,000 0.78 178,837 29.9 6,830,502
0.50 g/t cutoff total M+I 11,822,000 1.44 546,305 34.0 12,912,194
Inferred 3,956,000 1.13 143,605 42.9 5,456,291
0.70 g/t cutoff total M+I 8,697,000 1.74 487,526 38.8 10,839,541
Inferred 2,603,000 1.44 120,422 54.4 4,549,221
0.90 g/t cutoff total M+I 6,746,000 2.02 437,948 43.0 9,317,480
Inferred 1,859,000 1.71 101,910 64.2 3,838,727
1.0 g/t cutoff total M+I 5,914,000 2.17 412,696 45.2 8,595,092
Inferred 1,685,000 1.78 96,654 67.2 3,641,704

Exploration Potential

Features

  • Over 17.5 kilometres of mineralized strike length
  • 10 kilometres of untested strike
  • Multiple high grade surface grabs to be followed up
  • 15.1, 14.8 and 9.5 g/t gold at surface
  • Numerous surface showings untested

 

ZAPOTE DEPOSITS LONG SECTION DIVIDED BY GRADE ZONES

The Path Forward

1 Upgrade Resource

Upgrade 7.1 million tonnes of current Inferred resource to the Measured and Indicated category

  1. Approximately 2,000 metres of surface trenching
  2. Approximately 1,500 metres of drilling in 12 to 15 holes shallow
  3. Represents about 12% of the initial budget of $6M 
2 Expand Resource

Add new gold and silver ounces by drilling along strike and down dip adjacent to the existing pit-constrained resource areas

  1. Approximately 1,500 metres of surface trenching
  2. Approximately 3,500 metres of drilling with some drill holes reaching 200 metres in depth 
3 Logistics

Define the potential to add new gold and silver ounces in unexplored areas where existing data and new mapping data confirm the target potential

  1. Approximately 3,500 metres of surface trenching
  2. Approximately 5,000 metres of drilling with some drill holes reaching 350 metres in depth

Mapping and Sampling

  • A new detailed base geologic map is being prepared for the entire Los Reyes concession area
  • Surface mapping of the various rock types, alterations, geologic structures and other physical features
  • Log and analyze 13,000 metres of core contained in 89 drill holes in Prime’s core shack in Hermosillo
  • New regional soil and rock chip sampling and assaying will be completed to acquire fresh data

Schedule and Logistics

  • The program will work through the rainy season
  • Mapping and core logging activity is expected to be complete in September 2020
  • Trench channel sampling already in progress
  • Drilling is expected to begin when the base mapping and core logging is complete, sufficient surface trenching has been completed, and the rainy season has been accounted for regarding access, safety and road construction permitting in new areas

Metallurgical Test Work

  • Past metallurgical tests show heap leach recovery as a viable option
  • The drill and channel sample material sent to the assay lab will be analyzed for cyanide solubility using bottle roll and similar testing in order to build a stronger database of recovery data across the project